Foreword

Eileen Claussen, President, Pew Center on Global Climate Change

Approximately one-third of U.S. lands are covered by forests, which makes forest ecosystems prominent natural resources that contribute to biodiversity, water quality, carbon storage, and recreation. Forests also play a significant role in the U.S. economy, and forestry or forestry-related enterprises are the dominant industries in many U.S. communities. Human-induced climate change over the next century is projected to change temperature and precipitation, factors that are critical to the distribution and abundance of tree species.

Forests and Global Climate Change is the ninth in a series of Pew Center reports examining the potential impacts of climate change on our environment and health. A previous report in this series addressed the risks to terrestrial ecosystems posed by climate change. This report details the likely ecological and economic impacts of climate change over the next century on the U.S. forestry sector. Key findings include:

Forest location, composition, and productivity will be altered by changes in temperature and precipitation. Climate change is virtually certain to drive the migration of tree species, resulting in changes in the geographic distribution of forest types and new combinations of species within forests. Generally, tree species are expected to shift northward or to higher altitudes. In addition, climate change is likely to alter forest productivity depending upon location, tree species, water availability, and the effects of carbon dioxide (CO2) fertilization.

Changes in forest disturbance regimes, such as fire or disease, could further affect the future of U.S. forests and the market for forest products. Increased temperatures could increase fire risk in areas that experience increased aridity, and climate change could promote the proliferation of diseases and pests that attack tree species. Such disturbances may be detrimental to forests themselves, but may have a lesser impact at the market level due to salvage operations that harvest timber from dying forests.

U.S. economic impacts will vary regionally. Overall, economic studies indicate that the net impacts of climate change on the forestry sector will be small, ranging from slightly negative to positive impacts; however, gains and losses will not be distributed evenly throughout the United States. The Southeast, which is currently a dominant region for forestry, is likely to experience net losses, as tree species migrate northward and tree productivity declines. Meanwhile, the North is likely to benefit from tree migration and longer growing seasons.

As a managed resource, the implications of climate change for the forestry sector are largely dependent upon the actions taken to adapt to climate change. The United States has vast forest resources and currently consumes less timber than grows within the country each year. If professional foresters take proactive measures to substitute thriving tree species for failing species, to relocate forestry industry to productive regions, and to salvage trees during dieback, the sector may minimize the negative economic consequences of climate change.

A number of challenges currently limit our understanding of the effects of climate change on forestry. Existing projections for future changes in temperature and precipitation span a broad range, making it difficult to predict the future climate that forests will experience, particularly at the regional level. The ecological models used to relate forest distribution and productivity to changes in climate introduce additional uncertainty. Thus, current projections could fail to accurately predict the actual long-term impacts of climate change on the forestry sector.

The authors and the Pew Center gratefully acknowledge the input of Ralph J. Alig, Linda Joyce, G. Cornelis van Kooten, and William H. Schlesinger on this report. The Center would also like to thank Joel Smith of Stratus Consulting for his assistance in the management of this Environmental Impacts Series.

Executive Summary

Climate change is expected to have far-reaching consequences for forests and, subsequently, timber production in the United States. Although studies have shown that forests have adapted to temperature increases of 2-3°C (3.6-5.4°F) in the past, these changes occurred over thousands of years. Current climate predictions suggest that average global mean temperatures could rise 1.5-5.8°C (2.7-10.4°F) over this century alone. Such rapid changes in a relatively short period of time could affect forests significantly. Understanding how climate change will affect future forests and markets, however, is a complex task. Ecological and economic processes are exceptionally complicated, and understanding how integrated ecological and economic systems will respond to changing climate conditions remains a challenge. In spite of a number of remaining uncertainties, this report describes the many important insights into this process discovered over the last 10-20 years of research.

This report explores the potential effects of climate change on both natural and managed forest ecosystems, which differ significantly in their potential responses to climate change. Managed forests, such as forest plantations, receive significant amounts of human intervention in the form of planting, thinning and other management activities. These interventions have the potential to ameliorate the adverse effects of climate change. However, large areas of forest are considered natural and receive minimal direct human management, and thus may be more vulnerable to the effects of climate change. This duality within the forest sector makes it more difficult to state with precision what the overall economic impacts of climate change on forests will be. Further, the ecological changes caused by climate change could have large implications both for non-market attributes (e.g., biodiversity) and for other economic sectors associated with forests (e.g., recreation and water supply). The economic analysis in this report, however, focuses strictly on timber market impacts.

One of the most important ways that researchers discover clues about how forest ecosystems will respond to climate change is to explore the historical record for data regarding the impacts of past climate changes. This record indicates that individual tree species respond to warming either by changing their ranges or by increasing or decreasing their abundance. More recently, researchers have developed sophisticated models to explore how species distributions may change as climate changes. These changes could include increases or decreases in forest area, changes from one forest type to another, or movements of specific species from place to place.

In addition to species migration, it is important to consider how climate change could affect the productivity of forests (i.e., annual growth in forests). Existing studies show both positive and negative impacts on overall productivity, depending on the climate scenario. Further, some locations could experience higher productivity while others experience lower productivity. For example, forests in the southern United States are generally sensitive to the effects of drying, and productivity is more likely to decline there, while productivity is generally predicted to rise in the northern United States in response to low to moderate warming.

Understanding how productivity will change is complicated by an incomplete understanding of the effects of higher atmospheric carbon dioxide (CO2) concentrations on plant growth and ecosystem processes (so-called “carbon fertilization”). Experimental evidence suggests that carbon fertilization is likely to increase individual tree growth. Some evidence also suggests that the CO2 effect makes trees use water more efficiently, thereby making them less vulnerable to drought. Other evidence, however, suggests that the effects of carbon fertilization decline as trees age and at wider spatial scales where forest losses from other processes become important. Unfortunately, most measurements have been made on individual trees in experimental conditions, and not on entire forest ecosystems. In natural forests, and even in managed industrial forests, enhanced growth in trees could be offset by increased natural mortality elsewhere in the system. This is certainly the case for plantation forests where foresters usually predict increased thinning with higher growth in well-stocked stands.

While more precise regional estimates will be made as climate models provide a fuller understanding of regional climate change, and as ecological impacts become clearer, the existing results suggest that timber production could shift northward. Although some shifting will occur throughout most U.S. forests, the shifts would be strongest if the area suitable for southern softwoods expands northward. Hence, southern forests and markets appear most susceptible to climate change, in part because southern species are sensitive to drying effects, and in part because northward migration would erode the comparative advantage for timber production currently enjoyed by southern producers. Southern forests are also the most important economically since they account for well over one-half of U.S. production.

Changes in the frequency and intensity of disturbances like forest fires, pest infestations, and windthrow (i.e., from large storm events) are likely to have large consequences for the structure of both natural and managed forests. Natural forests, in particular, will be heavily influenced by changes in disturbances. Because disturbance has long been an important issue in forest management, managers have a number of tools available for adapting industrial and other managed forests as conditions change. Large-scale disturbances, however, can have substantial effects on markets. For example, although disturbances can cause substantial forest dieback, such ecological damages have the potential to cause short-term increases in timber supply, depressing timber prices for consumers.

As with agriculture, forest landowners have many options for adapting to the types of changes likely to occur with climate change, such as by salvaging dead and dying timber and by shifting to species that are more productive under the new climatic conditions. The long time lags between planting and harvesting trees, however, complicate the decisions for landowners. Adaptation can also occur at the market level, such as changing the types of species used in producing end products. End products are made from a wider variety of species today than 30 years ago; such adaptations help protect the market from large-scale changes in supply.

The following summarizes the current understanding of the potential impacts of climate change on U.S. forests and timber markets over the next century:

1. Tree species generally are expected to migrate northward or to higher altitudes in response to increased temperatures. While species will adapt over time by moving from one region to another, differential rates of change may cause significant differences in the types of natural stands in the future. Rates will depend critically on (a) how fast seeds migrate into new regions that are climatically suitable for a species after a climate change, (b) changes in the spread of insects and disease, (c) the spread of wildfire in different climates, and (d) human interventions to promote species migration.

2. Forest productivity is expected to change, but the changes could be positive or negative. Forests could become more or less productive, depending on how much climate changes (including both temperature and precipitation), how forests respond to higher carbon concentrations in the atmosphere, whether mortality changes, and whether disturbance-induced dieback increases or decreases. Many of these factors are expected to vary from region to region, suggesting that economic impacts are likely to differ among regions in the United States.

3. The effect of additional carbon dioxide in the atmosphere on forested ecosystems (“carbon fertilization”) is complex and uncertain, but it has large implications for understanding how forest productivity will change. Most studies suggest that forest area and productivity will increase if carbon fertilization enhances forest growth, but will decline if carbon fertilization does not occur. Plant-level experiments suggest that carbon fertilization will enhance tree growth, at least for some period of time. Scaling these results up to the ecosystem level is complex, but available studies suggest that carbon fertilization will be limited by competition, disturbance, and nutrient limitations. It is important to continue developing a better understanding of carbon fertilization effects, particularly at the ecosystem scale.

4. Changes in the frequency and severity of forest disturbance, such as storm damage, fires, and pests are likely to affect forest structure and function. The impact on markets, while generally negative, can be ameliorated by salvage. At the market level, salvage associated with disturbances can increase timber supply and reduce prices in the short-term, which benefits consumers. However, increased disturbance and lower prices generally have negative effects on landowners.

5. United States timber markets have low susceptibility to climate change because of the large stock of existing forests, technological change in the timber industry, and the ability to adapt. The United States currently consumes less timber than grows within the country each year, providing a cushion if climate change has short-term impacts on supply. Further, companies already substitute a wide array of species in end products, so that if particular species are negatively affected by climate change, markets can adapt by changing the types of species used in the production of end products. In addition, landowners can assist natural migration of timber by planting southern species in the North.

6. Economic studies have tended to find small negative to positive overall effects on timber production in the United States. While the studies have looked at a wide range of potential climate change effects across species within the United States, the net productivity effects used by the studies have tended to be positive over the long-term. Higher forest productivity translates into increased timber yield, increased timber inventory, increased supply, and lower prices. Lower prices generate overall net benefits, although they primarily benefit consumers at the expense of landowners. Lower forest productivity has the opposite effect.

7. Northern states may gain from climate change if productivity increases and if southern species move north, while southern states may lose production. Producers in southern regions are the most vulnerable to climate change because they have a large share of the nation’s current timber production capital, and the highly productive species in that region are sensitive to potential drying effects. Northern states are generally predicted to gain productivity and market share during climate change.

8. Understanding the economic effects of climate change on timber production is limited by scientific understanding of several key factors that control the response of natural and managed forests to climate change. Additional research is needed to enable ecologists and foresters to develop a more robust understanding of future changes in U.S. climate, ecosystem responses to climate change, the relationship between forest productivity and timber yield, and adaptation options available to foresters. Future clarification of these uncertainties will permit more informed assessments of the economic impacts of climate change to the forestry sector.

Conclusions

Unlike other sectors, such as agriculture, that are almost exclusively comprised of managed systems, forests are comprised of both natural and managed systems. This makes it more difficult to state with precision what the overall economic impacts of climate change on forests will be. Further, understanding the impacts on forests and timber markets is difficult given the long time lags between the planting and harvesting of trees.

Despite the many practical problems with understanding climate change impacts on forested ecosystems and timber markets, the combination of historical observation, modeling results, and experimental data allows us to draw several conclusions. Future research will certainly revise these conclusions, but the following points summarize the most important findings in the research to date regarding the overall impacts of climate change on forest ecosystems and timber markets over the next century:

1. Tree species generally are expected to migrate northward or to higher altitudes in response to increased temperatures. While species will adapt over time by moving from one region to another, differential rates of change may cause significant differences in the types of natural stands in the future. Rates will depend critically on (a) how fast seeds migrate into new regions that are climatically suitable for a species after a climate change, (b) changes in the spread of insects and disease, (c) the spread of wildfire in different climates, and (d) human interventions to promote species migration.

2. Forest productivity is expected to change, but the changes could be positive or negative. Forests could become more or less productive, depending on how much climate changes (including both temperature and precipitation), how forests respond to higher carbon concentrations in the atmosphere, whether mortality changes, and whether disturbance-induced dieback increases or decreases. Many of these factors are expected to vary from region to region, suggesting that economic impacts are likely to differ among regions in the United States.

3. The effect of additional carbon dioxide in the atmosphere on forested ecosystems (“carbon fertilization”) is complex and uncertain, but it has large implications for understanding how forest productivity will change. Most studies suggest that forest area and productivity will increase if carbon fertilization enhances forest growth, but will decline if carbon fertilization does not occur. Plant level experiments suggest that carbon fertilization will enhance tree growth, at least for some period of time. Scaling these results up to the ecosystem level is complex, but available studies suggest that carbon fertilization will be limited by competition, disturbance, and nutrient limitations. It is important to continue developing a better understanding of carbon fertilization effects, particularly at the ecosystem scale.

4. Changes in the frequency and severity of forest disturbance, such as storm damage, fires, and pests are likely to affect forest structure and function. The impact on markets, while generally negative, can be ameliorated by salvage. At the market level, salvage associated with disturbances can increase timber supply and reduce prices in the short term, which benefits consumers. However, increased disturbance and lower prices generally have negative effects on landowners.

5. United States timber markets have low susceptibility to climate change because of the large stock of existing forests, technological change in the timber industry, and the ability to adapt. The United States currently consumes less timber than grows within the country each year, providing a cushion if climate change has short-term impacts on supply. Further, companies already substitute a wide array of species in end products, so that if particular species are negatively affected by climate change, markets can adapt by changing the types of species used in the production of end products. In addition, landowners can assist natural migration of timber by planting southern species in the North.

6. Economic studies have tended to find small negative to positive overall effects on timber production in the United States. While the studies have looked at a wide range of potential climate change effects across species within the United States, the net productivity effects used by the studies have tended to be positive over the long-term. Higher forest productivity translates into increased timber yield, increased timber inventory, increased supply, and lower prices. Lower prices generate overall net benefits, although they primarily benefit consumers at the expense of landowners. Lower forest productivity has the opposite effect.

7. Northern states may gain from climate change if productivity increases and if southern species move North, while southern states may lose production. Producers in southern regions are the most vulnerable to climate change because they have a large share of the nation’s current timber production capital, and the highly productive species in that region are sensitive to potential drying effects. Northern states are generally predicted to gain productivity and market share during climate change.

8. Understanding the economic effects of climate change on timber production is limited by scientific understanding of several key factors that control the response of natural and managed forests to climate change. Additional research is needed to enable ecologists and foresters to develop a more robust understanding of future changes in U.S. climate, ecosystem responses to climate change, the relationship between forest productivity and timber yield, and adaptation options available to foresters. Future clarification of these uncertainties will permit more informed assessments of the economic impacts of climate change to the forestry sector.

About the Authors

Dr. Herman H. ShugartUniversity of Virginia

Herman H. Shugart is the W.W. Corcoran Professor of Environmental Sciences at the University of Virginia. Prior to joining the University of Virginia in his current capacity in 1984, he worked for 13 years in Tennessee – eventually as a Senior Research Scientist at Oak Ridge National Laboratory and as a Professor in Botany at the Graduate Program in Ecology at the University of Tennessee. Dr. Shugart has also served as a Visiting Fellow in the Australian National University (1978-1979, 1993-1994), in Australia’s Commonwealth Industrial and Scientific Research Organization, Division of Land Use Research (1982) and Division of Wildlife and Ecology (1993-1994), in the International Meteorological Institute at the University of Stockholm, Sweden (1984), and in the International Institute of Applied Systems Analysis, Laxenburg, Austria (1987,1989).

Dr. Shugart has served on the editorial board of several scholarly journals including Ecology, Ecological Monographs, Annual Reviews in Ecology and Systematics, Biological Conservation, Landscape Ecology, Journal of Vegetation Science, Forest Science, Global Change Biology, and The Australian Journal of Botany. He is the author of 300 publications including 12 books, 65 book chapters and 114 papers in peer-reviewed journals. A recent book, Terrestrial Ecosystems in Changing Environments was published in 1998 by Cambridge University Press, which reviews the ecological issues of predicting responses to global and regional climatic change. Recent honors include his election, as a foreign member, to the Russian Academy of Sciences in recognition of his work in Forest Ecology (2001); his designation as the 1999 Distinguished Alumnus from his alma mater, Department of Biological Sciences, University of Arkansas; and his identification as a Highly Cited author (top 1/2 percentile of scientific citations) in the area of Ecology/Environment by the Institute for Scientific Information.

Dr. Shugart received B.S. and M.S. degrees in Zoology at the University of Arkansas and received his Ph.D. (also in Zoology) from the University of Georgia in 1971.

Roger A. SedjoResources for the Future

Dr. Sedjo is a Senior Fellow and the Director of the Forest Economics and Policy Program at Resources for the Future (RFF), a Washington based policy research organization, and the President of the Environmental Literacy Council (ELC), a nonprofit environmental education group. Dr. Sedjo has written extensively on forest and environmental issues, both domestic and international, having authored or edited fourteen books related to forestry, natural resources and the environment. His early work focused on timber supply and forest plantation issues, while more recent work is devoted more to the environmental aspects of forests.

Dr. Sedjo has served on a number of scientific panels and was a member of the Secretary of Agriculture’s Committee of Scientists, which made recommendations on Forest Service planning, and edited a recent book, A Vision for the US Forest Service (2000). He was a co-Chair of the chapter on “biological carbon sinks” in the Intergovernmental Panel on Climate Change’s (IPCC) Third Assessment Report (2001). He was also a contributor to two chapters in the IPCC’s Second Assessment Report (1995 ). Additionally, he has worked for the past several years with the Japanese Government in assessing their options toward meeting their carbon targets under the Kyoto Protocol. Recently, he has completed a study for the Department of Energy that resulted in the report, Estimating Carbon Supply Curves for Global Forests and Other Land Uses (with Brent Sohngen and Robert Mendelsohn). In addition, his recent papers on climate change have been featured in Bulletin of the Forestry and Forest Products Research Institute, Journal of Agricultural and Resources Economics, and Environment Science and Policy.

Dr. Sedjo has been a consultant to a wide array of organizations including the World Bank, the Global Environmental Facility, the Asian Development Bank, U.S. Agency for International Development, the OECD, Harvard Institute for International Development and others. Dr. Sedjo earned his B.A. and M.S. degrees at the University of Illinois, and a Ph.D. at the University of Washington (Seattle).

Dr. Brent L. SohngenThe Ohio State University

Brent Sohngen is an associate professor in the Department of Agricultural, Environmental, and Development Economics at The Ohio State University. Prior to his appointment at Ohio State in 1996, he was a Gilbert White Postdoctoral Fellow at Resources For the Future in Washington, D.C.

His primary research interests lie in modeling land-use and land-cover change, examining impacts of climate change in the forestry sector, and the economics of nonpoint source pollution. Dr. Sohngen also leads an extension and outreach program in environmental and natural resource economics. The program focuses on linking research on natural resource and environmental economics to natural resource policy and management issues in the state of Ohio.

He obtained a bachelor’s degree from the Department of Agricultural Economics at Cornell University in 1991, and a doctorate from Yale University in 1996.